Can a California Landlord Evict Over Rent Unpaid for More Than a Year?

In January 2023, a restaurant owner in San Gabriel skipped a month of rent. He believed his landlord owed him a discount, so he took it himself. Then he paid every month, in full, for the next two years. In February 2025 the landlord served a three day notice to pay rent or quit demanding the exact amount he had withheld in 2023, won an eviction, and was awarded $123,111 in holdover damages on top of the back rent. On September 9, 2026, the Court of Appeal threw out all of it. The landlord had waited too long, and a clause in its own lease could not change that.

If you own or lease commercial space in Los Angeles, this is a decision to read closely, because the clause the landlord relied on is common in commercial leases and the theory it supported is one many landlords assume is sound.

The one year rule in a California three day notice

An unlawful detainer is California's fast track eviction lawsuit. Before a landlord can file one for unpaid rent, it must serve a valid three day notice to pay rent or quit under Code of Civil Procedure section 1161, subdivision (2). That statute sets out what the notice must say, including the amount due and to whom and where it must be paid. It also contains a time limit that is easy to overlook: "The notice may be served at any time within one year after the rent becomes due."

Courts enforce the eviction statutes strictly, because the procedure is summary. A notice that does not comply is not a notice at all, and it cannot support a judgment for possession. Under WDT-Winchester v. Nilsson (1994) 27 Cal.App.4th 516, a Sixth District decision, a commercial landlord who fails to comply is left with "an ordinary suit for breach of contract with all the delays that remedy normally involves and without restitution of the demised property."

The purpose of the one year window is straightforward. It keeps a landlord from sitting on an old default and then pulling it out years later, when the landlord has some other reason to want the tenant gone.

What happened in Universal Shopping Plaza v. Hong

Universal Shopping Plaza v. Hong (Sept. 9, 2026, B348490) is a published decision of the Second Appellate District, Division Seven, on appeal from the Los Angeles County Superior Court.

Piong Bin Hong operated Five Star Restaurant in Universal's shopping plaza on West Valley Boulevard under a five year lease running from 2017 through 2021, at base rent of $30,625 a month with 3 percent annual increases. When the lease expired, the parties continued month to month.

Hong believed a leasing manager had promised him a 10 percent pandemic rent reduction for 2022 that was never applied. In a January 5, 2023 letter, he told the landlord he had overpaid $65,989 in 2022 and would take that credit against his rent. He paid nothing for January 2023 and paid $8,600 less than the full amount in February. On January 25, 2023, the landlord notified him in writing that he was in breach. Then it did nothing further. Hong paid the full rent every month from March 2023 through February 2025.

On February 12, 2025, eleven days after Hong paid his February rent in full, Universal served a three day notice demanding $65,989 in unpaid rent. The notice did not say which months that figure covered. Universal filed an unlawful detainer, and after a three day bench trial in which Hong represented himself through a Mandarin interpreter, the trial court entered judgment for the landlord: possession, $65,989 in past due rent, and $123,111 in holdover damages.

The landlord's theory: the tenant was always a month behind

Universal did not dispute that the missed payments were from January and February 2023, well over a year before the notice. Its argument rested on paragraph 4.5 of the lease, titled "Application of Payments," which said that every payment the tenant made "shall be applied to the oldest payment of obligation owed," and that no designation by the tenant could change that.

Here is how that clause was supposed to work. When Hong paid in March 2023, the money went to cover January. April's payment covered February, and so on down the line. On that accounting, Hong never caught up. Every month for two years he was paying the previous month, so there was always a current month unpaid, and the notice in 2025 was simply collecting a fresh default. At trial, the landlord's leasing manager answered "Yes" when asked whether it was accurate to say that once Hong fell behind, "he was always about a month behind in rent because the payments received were applied to the oldest balances." The trial court accepted that reasoning.

Why the Court of Appeal rejected it

The Court of Appeal reversed and directed entry of judgment for Hong. Its reasoning turned on the words of the statute. Section 1161(2) runs the one year period from the date "the rent becomes due." Under paragraph 4.1 of this lease, rent became due on the first day of each month. January's rent was due January 1, 2023, and the shortfall in February's rent was due February 1, 2023. So the latest date Universal could have served a valid notice based on that nonpayment was February 1, 2024.

The allocation clause did not move those dates. The court acknowledged that such a provision might affect how much a tenant owes and, potentially, the limitations period for a breach of contract suit. But it does not change when rent "becomes due," and that is the event the statute measures from.

The court also explained why the landlord's reading could not be right. If an allocation clause could keep an old default permanently current, then, in the court's words, "a landlord could take no action on a missed rent payment for years, then, once prevailing market rates increase, pursue a summary eviction of the tenant with just three days' notice." That is precisely what the one year limit exists to prevent. The facts made the point for it: the amount in the 2025 notice matched the 2023 shortfall to the dollar, and the landlord admitted the notice was based on it.

When old rent can still appear in a notice

The decision does not mean a notice can never mention rent older than a year. In Levitz Furniture Co. v. Wingtip Communications, Inc. (2001) 86 Cal.App.4th 1035, the First District held that including rent more than a year old is not fatal to an unlawful detainer if the notice also demands rent that came due within the year. As the Hong court described that rule, the landlord in that situation can collect only the rent inside the one year window in the eviction case, and must pursue the older amount in a separate breach of contract action.

Universal's problem was that nothing in its notice fell inside the window. Hong was current by any measure except the landlord's allocation clause. With no recent unpaid rent, there was nothing for the notice to stand on.

What the landlord still has, and what the tenant did not win

It would be a mistake to read this as a win on the merits for the tenant. It is not.

1. The debt may still be collectible. The court noted that Universal can still sue for breach of contract within the four year limitations period. For a written contract, that period is set by Code of Civil Procedure section 337. On a simple count from the 2023 due dates, that period has not yet run.
2. The tenant's self help did not fare well below. The trial court found the claimed discount was never an effective modification because the lease required changes in writing, and it called Hong's decision to simply stop paying "problematic." The appeal did not turn on that finding. Hong won on the notice, not on the discount.
3. What the landlord lost was the fast track. Possession, the three day deadline, and $123,111 in holdover damages all depended on a valid notice. Without one, the landlord is left with an ordinary lawsuit for money and no eviction.

The court also did not decide Hong's separate complaint that the notice failed to identify which months the $65,989 covered. The one year problem resolved the appeal.

What commercial landlords should do now

Treat the first missed payment as the start of a clock. If a tenant withholds rent, you have one year from each due date to serve a notice based on it. Sending a breach letter and then continuing to accept rent does not stop that clock, and an allocation clause will not restart it.

Do not wait for certainty about the number. Uncertainty over common area charges or a disputed credit is not a reason to delay. For commercial property, Code of Civil Procedure section 1161.1 allows a notice to state an amount that is clearly identified as an estimate. If the estimate was reasonable, the landlord can still obtain possession and the amount actually found due, and the statute presumes an estimate is reasonable if it is within 20 percent of the amount the court determines.

Decide early whether you want the space or the money. A landlord that wants a tenant out should act inside the year. A landlord content to keep the tenant and collect later should understand that it is choosing a breach of contract remedy, not preserving an eviction.

Review your ledger before serving. If the amount in your notice matches an old dispute to the dollar, assume a court will see it exactly the way the Hong court did.

What commercial tenants should do now

Ask which months the notice covers. If a three day notice demands a lump sum and you have been paying every month, find out what the landlord's ledger says the amount represents. If every dollar traces back more than a year, the notice may be invalid.

Do not rely on this decision to avoid paying. Hong protects a tenant from summary eviction over stale rent. It does not erase the rent. A breach of contract suit can follow, often with attorney fees if the lease provides for them.

Put rent disputes in writing and resolve them formally. Withholding rent over a disputed oral promise put this tenant through a trial, a judgment for possession, and an appeal. He won, but the path was expensive, and a tenant with a lease requiring written modifications starts that fight at a disadvantage.

Move quickly if you are served. Unlawful detainer deadlines are short. A defect in the notice is a defense only if you raise it.

A note on scope: the one year language sits in section 1161(2), which is not limited to commercial property, but residential evictions in Los Angeles carry additional state and local requirements that this case did not address. And Hong was filed on September 9, 2026, so it remains subject to further review; treat it as the current state of the law rather than the last word.

For related reading, see our guide to breaking a commercial lease in California, our overview of breach of contract claims, when you can recover attorney fees in litigation, and how a writ of attachment can secure a money claim before judgment.

Talk to a Los Angeles real estate attorney

The Darvish Firm's Los Angeles real estate litigation lawyers represent commercial landlords and tenants in lease disputes, unlawful detainer actions, and suits for unpaid rent. If you are about to serve a three day notice, or you have just received one, the timing is measured in days. Call (310) 677-3512 or request a consultation.

This article is general information about California law, not legal advice, and reading it does not create an attorney-client relationship. Every case depends on its facts. Consult an attorney about your specific situation.